A sole proprietorship is a type of business owned and operated by one individual. The business' profits are reported as part of the owner's personal income tax return, which is much easier to manage than the tax processes required of other business entities, but the sole proprietor is also responsible for any debts or claims against the business.
While it’s less hassle to register a sole proprietorship, be sure that you can handle personal liability for all expenses incurred, since you do not enjoy the liability protection afforded to a Limited Liability Company or a corporation. A sole proprietorship is a common business structure for small or home-based businesses, independent contractors, musicians or artists or small boutique shops. When it comes to paperwork and startup costs, a sole proprietorship the simplest type of business to form. However, depending on the business you'll still need to obtain certain licenses and permits, and if you have or plan to hire employees, you'll need to file with the IRS and your state's labor department.
Get all the information and forms you'll need to create your own sole proprietorship here, along with articles, step-by-step guides and checklists that will help you stay assured you’re registering and running your sole proprietorship properly. Read DIY marketing and sales strategies that will allow you to promote your business on your own, and grow a successful business as a sole proprietor.